TaxTMI 
TaxTMI 
2023 (2) TMI 95
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....ial Rates". BRIEF FACTUAL MATRIX Petitioner is stated to be a company incorporated under the Companies Act 1956. It has been averred that the petitioner's property was notified as IT-ITES SEZ by the Ministry of Commerce & Industry, Department of Commerce, Government of India as well as by the Industries and Commerce Department, Government of Haryana. Pursuant to such approval, the petitioner's properties were leased out to various lessees for setting up of SEZ units. The Haryana Government, Urban Local Bodies Department issued a notification dated 11.10.2013 in terms of Section 87 (3) read with Section 149 (1) of the Haryana Municipal Corporation Act 1994 (hereinafter to be referred to as the '1994 Act') imposing property tax on buildings and lands within the limits of the concerned municipal corporation. Copy of the notification dated 11.10.2013 stands appended as Annexure P-5 alongwith the petition. Thereafter the Haryana Government vide notification dated 03.03.2014 (Annexure P-6) brought out an amendment to the notification dated 11.10.2013 and inter alia inserted para 2F (xiii) and which was in the following terms:- "(xiii) IT Park, Cyber City/Park 50....
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....erty at industrial rates in respect of IT/ITES and its allied infrastructure buildings in the SEZ. However, the area under the SEZ where the petitioner was carrying out any commercial activity such as restaurant, hotel etc. and which is not related to information technology industry the same were held to be liable to be taxed as per commercial rates and likewise a view was taken that if the petitioner is carrying out any residential activity in the SEZ, the rates applicable for residential purpose ought to be levied and the factum of vacant land, under construction areas and basement for parking to be duly considered while levying property tax. Copy of the order dated 11.11.2018 passed by the Divisional Commissioner stands placed on record as Annexure P-23. Thereafter, on 26.01.2019 the respondent-Municipal Corporation, Gurugram preferred a revision before the Ist respondent i.e. The Principal Secretary, Government of Haryana, Urban Local Bodies Department. Such revision was allowed vide order dated 29.10.2021 and thereby setting aside the order dated 15.11.2018 passed by the Divisional Commissioner. Petitioner then filed CWP No.22675 of 2021 assailing the order dated 29.10.2021 p....
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....referred to submit that such policy recognizes six distinct categories on IT/ITES in terms of facilities and restrictions available to them and the IT/ITES Sector Specific SEZ has been treated as a completely district and separate category thereunder. The six categories under the 2011 policy are:- (i) IT/ITES and other Technology Unit; (ii) IT/ITES/Cyber/Technology Park; (iii) Technology City/Cyber City; (iv) IT/ITES Sector Specific SEZ; (v) Cyber/IT Parks/ other (set up within the HSIIDC/HUDA Developed Industrial Estates); (vi) Technology Parks (Established within HSIIDC/HUDA developed Industrial Areas on campus development norms). Further submitted that the 2011 industrial policy of the State provides that EDC rates for the SEZs would be applicable as it is for the industrial sector. Contention raised is that the intent of the 2011 industrial policy of the State of Haryana is to treat SEZs as an industry. In view of the above it was argued that the petitioner's property which is IT/ITES and SEZ is liable to be classified under the category of "Industry" and cannot be treated as a subject matter of taxation under Para 2 F (xiii) of the notification dated 11....
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....t is submitted that 1994 Act does not contemplate the applicability of any provision of the Limitation Act 1963 so as to empower the Revisional Authority to condone any delay whatsoever in filing of the revision application. It is urged that respondent No.1 was to be seen as a statutory authority while dealing with the revision application and such authority could not have condoned the delay in filing of the revision application since the Scheme of 1994 Act did not empower him to do so. In support of such contention judgement of the Apex Court was relied upon in Ganeshan Vs. T.N. Hindu Religious & Charitable Endowments Board (2019) 7 SEC 108. It is submitted that the Apex Court held that the suits, appeals and applications referred to in the Limitation Act 1963 are suits, appeals and applications which are to be filed in a Court and not before any statutory authority. It is further held in the judgment that a special or local law could vide its statutory scheme provide for the applicability of any provision of the Limitation Act 1963 or exclude applicability thereof. Further argued that in the present case the revisional authority under no circumstances could have condoned the dela....
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....ion dated 03.03.2014. It has been submitted that the rate of property tax is to be notified keeping in view various factors like location of property/building, the purpose for which said property is being used, its capacity for profitable use and other relevant factors. The purpose for which land/building is put to use is one of the important factors for levying of property tax by the concerned authority. Even if the building is set up for a specific purpose but such building is being used for a different purpose, for example if a industrial building is converted for use of IT enabled services, the property tax would be levied on the basis for which it is being used actually. In other words even if the building/premises is situated within the specific earmarked area like SEZ, the levying of the property tax on the building will be made on the basis of actual usage of such building within SEZ. It is further asserted on behalf of the respondents that the building/premises falling in SEZ/industrial township/residential township can be used for different purposes and different rates of property tax accordingly will be levied on each and every building on the basis of actual usage and n....
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....f the Haryana Municipal Corporation Act 1994 reads as under:- "87. Taxes etc. to be imposed by Corporation under this Act and arrangement of certain taxes collected by Government-- (1) The Corporation shall, for the purposes of this Act, levy the following taxes- 1 "[(a) a property tax payable by the owner or occupier of building and land at the rates notified by the Government, from time to time depending upon the area in which the building or land is situated, its location, purpose for which it is used, its capacity for profitable use, quality of construction and other relevant factors; (b) 2 [ -----] such other tax, at such rates as the Government may, by notification, in each case direct; (c) a duty on the transfer of immovable properties situated within the limits of the municipal area in addition to the duty imposed under the Indian Stamp Act, 1899, as in force for the time being in the State of Haryana, on every instrument of the description specified below and at such rate, as the Government may, by notification, direct, which shall not be less than one percentum and more than three percentum on the amount specified below against such instruments:- Description of....
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....sions of this Act and the bye-laws made there under. (4) The Government may, by special or general order, direct the Corporation to impose any tax falling under sub-section (1) or sub-section (2) not already imposed, within such period as may be specified and the Corporation shall thereupon act accordingly. (5) If the Corporation fails to carry out any order passed under sub-section (4), the Government may, by a suitable order notified in the Official Gazette, impose the tax and the order so passed shall operate as if the tax had been duly imposed by the Corporation under sub-section (1) or sub-section (2) as the case may be." In exercise of the powers conferred by Sub-Section 3 of Section 87 read with sub-Section 1 of Section 149 of the 1994 Act, the Haryana Government, Urban Local Bodies Department issued notification dated 11.10.2013 (Annexure P-5) imposing property tax on buildings and land within the limits of the concerned Municipal Corporation. Subsequently a notification dated 03.03.2014 (Annexure P-6) was issued carrying out an amendment in the previous notification dated 11.10.2013 and as per which in para 2, Item F sub para (xiii) was inserted and to the followin....
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....oned therein." Clause 2 (G) of the notification dated 11.10.2013 (Anenxure P-5) stipulates that in case of the mixed used of premises in any property, the liability of tax shall be calculated as per area under different usage. In other words if a single building is being used for different and mixed purposes, then the property tax will be levied taking into consideration the usage of the specific area of the building/premises under different heads. In our considered view the petitioner cannot escape the rigors of imposition of property tax at "commercial rates" in respect of such specific area which is being used for IT/ITES only on the basis that it falls under a separate distinct category of SEZ and as such ought to be levied property tax at industrial rates. It is not even the case projected in the pleadings that no area of the building/premises of the petitioner even though recognised as SEZ is not being used for IT/ITES purposes. Mere non-mention of IT in the SEZ category cannot be taken as a tenable ground for non-levy of property tax at commercial rates. We do not find any merit in the contention raised on behalf of the petitioner that it is a case of taxation by implicat....
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....lated thereto within the Special Economic Zone shall be exempted from stamp duty. 19. Nothing in this Act shall affect:- (i) any right, privilege, obligation or liability acquired, accrued or incurred under any other law; (ii) any penalty, forfeiture, or punishment incurred under any other law; (iii) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation or liability; and Any such investigation, legal proceedings or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if this Act had not been passed. Undoubtedly Section 11 (1) of the 2005 Act envisages various benefits to a SEZ but the same is subject to any other law. Section 11 (1) list out the exemptions granted to a SEZ but there is no mention of exemption of property tax to be levied by the concerned municipality. On the other hand Section 19 of the 2005 Act, is couched in clear and unambiguous language regarding any liability, obligation etc.of a SEZ as far as implementation of any other law is concerned. It can thus be concluded that provision of any other law including the Haryana Municipal Corporation Act....
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....ers under the provisions of the 1994 Act that the notifications dated 11.10.2013 and 03.03.2014 Annexures P-5 and P-6 have been issued. The levy of property tax has to be necessarily as per the charging provision contained under the 1994 Act as also the notifications issued therein. The petitioner as such cannot be permitted to gain any mileage from the notifications/SEZ policies that may have been issued in relation to other states across the country. This Court is also unable to accept the contention with regard to violation of the principles of natural justice. Admittedly, after issuance of the demand notices levying property tax at commercial rates, the petitioner availed of the statutory remedy of appeal before the Divisional Commissioner under the provisions of the 1994 Act. The appellate authority took a view in favour of the petitioner. It is thereafter that Municipal Corporation Gurugram preferred a revision before the State Government under Section 140 of the 1994 Act. It is upon consideration of such revision petition that the impugned order dated 30.11.2021 (Annexure P-1) has been passed by the Principal Secretary, Urban Local Bodies Department. Both at the appellate a....
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....on in writing to the Government for revision against the said order and the Government may confirm, alter or rescind the said order:- Provided that the Government shall not pass an order under this section prejudicial to any person without giving such person a reasonable opportunity of being heard." Section 140 of the afore-reproduced nowhere expressly excludes the applicability of the provisions of the Limitation Act. The provisions of Section 5 of the Limitation Act would be applicable as they are not expressly excluded by the provisions of the 1994 Act. At this point a reference may also be made to Sections 117 to 120 of the 1994 Act falling under Chapter VIII. Section 117 empowers the Corporation to charge development tax on the increase in the value of the land or building comprised in a scheme put into operation within the Municipal Area. Section 118 and Section 119 deal with the amount of development tax and payment of development tax respectively. Section 120 deals with assessment of development tax. Under Section 120 (1) the Commissioner may assess the amount of development tax payable by the person(s) concerned and is obligated to give a notice in writing statin....